Industrial relations in Europe 2000


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Employment policy
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Industrial relations in Europe
Employment U social affairs
Industrial relations and industrial change
European Commission
Directorate-General for Employment and Social Affairs
Directorate D
Manuscript completed in March 2000 The contents of this publication do not necessarily reflect the opinion or position of the European Commission,
Directorate-General for Employment and Social Affairs.
If you are interested in receiving the electronic newsletter 'ESmail' from the European Commission's Directorate-
General for Employment and Social Affairs, please send an e-mail to The newsletter is
published on a regular basis in English, French and German.
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It can be accessed through the Europa server (
Cataloguing data can be found at the end of this publication.
Luxembourg: Office for Official Publications of the European Communities, 2000
ISBN 92-828-8970-X
© European Communities, 2000
Reproduction is authorised provided the source is acknowledged.
Printed in Belgium
Social policy plays an essential role in our efforts to build a more caring Europe,
more united and more successful in economic terms. It gives meaning to our
actions. It enables us to mobilise strengths and combine forces in working
towards shared aims.
This first Commission Report on Industrial Relations shows that European
social policy has far-reaching effects; it is steadily becoming a more integral
part of the decision-making and strategies of numerous players.
That goes without saying in fields where the European Union has clearly
defined and affirmed its principles: respect for fundamental social rights in a
frontier-free Europe; workers' rights to information and consultation on
company operations; social dialogue as a mainstay of good governance and a
means of involving citizens in the European venture.
However, far beyond such areas, it is interesting and encouraging to note that
the European dimension is on the table in national negotiations on wages or
the adaptation of working time, and that it was raised in the discussions
culminating in the conclusion of the national employment pacts.
For that reason, it was important to have a tool for information and analysis
at our disposal, available to a wide public, increasing our understanding of this
common heritage and throwing light on the initiatives taken by those who
play a part in shaping day by day the image of social Europe.
Anna Diamantopoulou
Industrial Relations in Europe Summary
Industrial Relations in Europe 1 Editorial
matters. At national level, new tripartite τ. his report, the Commission's first on the subject
approaches were taken in 11 Member States
of industrial relations in Europe, fulfils a require­
during the 1990s, leading to the adoption of ment for greater transparency in an area which
a series of social pacts for employment. At affects the everyday life of Europe's citizens. The
European level, the social partners have been
information it contains is intended for a wide
concerned mainly with getting the European
audience, with an eye to boosting industrial rela­
employment strategy off the ground, and tions at all levels.
their contribution to this process is the cur­
rent focus of attention.
Key developments occurring over the last few years
are also noted in the report. The firmly rooted
Wage developments have been very modera­national element of industrial relations has assu­
te in the European Union over the past two med a wider dimension as a result of growing
decades, with increases in real employee Europe-wide cooperation in the economic, mone­
compensation tending to remain below pro­tary and employment spheres, giving rise to inno­
ductivity growth. As a result, real unit labour vative, flexible forms of interaction. These changes
costs fell by about 6% between 1991 and are happening quickly but are not yet completed.
1998, thereby paving the way for a readjust­
ment of economic policy and stabilisation of
Depending on the Member State or sector concer­
inflation at a very low level. From an avera­ned, industrial relations are driven mainly by indi­
ge rate of around 10% between 1970 and vidual employment contracts, company or branch
1985, inflation has fallen to less than 2%. agreements and national rules laid down on a sta­
The introduction of macro-economic dia­tutory or collectively agreed basis. While a quarter
logue and increasing awareness of the of the Member States' wealth on average is derived
European dimension among national nego­from exports to the rest of the Union, meaning that
tiators is impacting markedly upon wage
one worker in four is producing for the "internal"
negotiations. market, the underlying social conditions continue
to be determined locally. The developments high­
lighted in this report show that the players invol­ Enlargement will bring into the European
Union a number of countries with wage ved must increasingly take the European dimen­
levels in the region of 300 euro per month, sion into account.
as opposed to more than 2 000 euro in many
of the current EU Member States. However,
these wage levels are roughly in line with Highlights
productivity. Far from being a competitive
The major influences on industrial rela­ threat to the 15 Member States, Central and
Eastern Europe represents a huge and gro­tions in the European Union over the last
wing market that absorbs more imports from few years have been as follows:
the current EU than it exports to it. The EU's
trade surplus amounted to some 27 billion - Economic and monetary union has helped
euro in 1998. to create a more cooperative industrial rela­
tions climate based on shared macro-econo­
mic objectives. The sharp drop in the num­ The annual duration of working time in
ber of labour disputes illustrates this change. 1998 was 1 660 hours, ranging from 1 425 in
The number of working days lost through the Netherlands to 1940 in Greece.
disputes in the European Union fell from Innovative changes in hours of work and
more than 85 million in 1979 to less than 7 working patterns are now widespread, geared
million in 1996. to achieving not only greater flexibility but
also a restructuring of working life, family
- In spite of the far-reaching structural life and leisure time. Involvement in part-
changes affecting industry and the European time work continues to grow, covering 6% of
economy more generally, and consequently men and over 30% of women in 1998. The
their members, the social partners have question of reducing weekly working hours
adapted and they now have a greater say in is still very topical.
Industrial Relations in Europe ticipation in profits and enterprise results is a step
- The social dialogue at European level is in the right direction, giving rise to new forms of
expanding considerably. More than 100 in-house organisation. 80% of the 500 largest
texts adopted jointly over a 10-year period European companies have already introduced
and six recent agreements provide evidence financial participation schemes. Innovative
of this dynamism. Under the Treaty, the methods are springing up in a number of Member
European social partners now have a greater States and the Commission is keeping a keen eye
say in shaping social policy. Three cross- on the situation.
industry agreements have been incorporated
into directives, thereby becoming compulso- The social partners continue to have the final say
rily applicable.
on wages, although there is a limiting factor in that
the public authorities determine the level of social
security contributions - generally between 30 and
close to 60% of the total labour cost. They may give
Wages guidelines, e.g. by setting minimum wage levels, as
is the case in eight Member States. It is, however,
the social partners' input which, in the final analy­In the 1980s, the European social partners were for­
sis, determines general wage trends. ced to experience wage restraint. Erratic rises in
nominal wages - reaching an average of 14% in the
1970s - were quickly eaten away by inflation. As a In this context, the persistence of gender-related
wage inequalities is all the more unacceptable. In result, the social partners, governments and mone­
spite of a Directive adopted in 1975 (75/117/EC), tary authorities began to favour a concerted strate­
the wage gap between men and women remains at gy. The policy of nominal wage restraint has helped
to get inflation under control (falling below 2%) around 28%, due partly to objective factors such as
couples' sharing of responsibilities (women having and offers the best prospect of an increase in real
more frequent career breaks), and reflecting also wages.
the difficulty of reconciling work and family life.
The social partners can help to lessen such inequa­This policy, pursued over a 15-year period, paved
lity by incorporating the gender dimension into the way for the convergence needed to establish
their agreements and by giving women more pro­economic and monetary union. The credibility of
minence in collective bargaining. the process is reflected in the long-term lowering of
interest rates, now in the region of 4%. This policy
remains vital to the ongoing process of regenera­ The next enlargement will bring in countries with
low wage levels compared to the current EU States. ting the European economy.
Far from being a homogeneous group, the candida­
te countries themselves display significant wage-A radical change in the outlook of trade unions and
cost differentials, varying from 105 euro per month employers is a necessary corollary to such develop­
in Bulgaria to 854 euro in Slovenia. With labour ments. The social partners have been obliged to
productivity taken into account, the wage competi­include the question of macro-economic stability in
tiveness of the candidate countries is close to that their discussions; their key role in macro-economic
of the European Union. The EU's experience of development has been recognised at the highest
integrating Portugal, Spain and Greece shows that level of the European Union. The Cologne European
the raising of real wages is a slow process, in line Council set up a permanent mechanism for
with internal productivity trends rather than an exchanges at technical and policy levels between the
abstract European "norm". social partners, the Council, the Commission and
representatives of the European Central bank.
Furthermore, it is generally the high-wage coun­
tries that benefit most from trade. This is particu­These "macro-economic dialogue" meetings show
larly striking in relations between the EU and how the fundamental approach to wage negotia­
Central and Eastern Europe : Western Europe had a tion is changing and how European developments
large trade surplus of 27 billion euro with Central are influencing decentralised industrial relations.
and Eastern Europe in 1998.
One point to note is that, given these changes, cer­
tain trade-union bodies are coming together to
rethink at multinational level the terms of wage Working time
negotiation. These efforts are aimed at strengthening
Besides wages, the second structural element of col­the trade-union negotiating stance over a broader
lective bargaining lies in determining working time range of issues, including the objective of macro-eco­
and patterns of work. While recent developments nomic stability, and encompassing access to training,
in wage negotiation have centred around the objec­equal opportunities and mobility.
tive of economic stability, discussions on the orga­
nisation and duration of work have diversified and The goal of stability has also led the social partners
expanded, being currently the focus for numerous to look for other ways of sharing in productivity
innovations. gains. The development of schemes to provide par­
Industrial Relations Europe 3 ι n The standard model of daily, weekly, monthly and sector have, moreover, negotiated a reduction in
annual working time is the subject of much debate. annual working time as part of a process to impro­
Working-time flexibility is emerging in the shape of ve the organisation of work and promote employ­
variable hours, the development of part-time or ment. Such developments show how this issue is
weekend working, the annualisation of working being addressed at Community level and give some
time and the introduction of opportunities for idea of the far-reaching economic and social impli­
taking career breaks and adjusting the age of retire­ cations of discussions or measures dealing with the
ment. Between 1985 and 1998, part-time work duration and organisation of working time.
increased from 4 to 6% for men and from 28 to
32% for women.
Social dialogue at European level
These developments reflect the need to adapt pro­
duction rhythms and service availability more close­ The European social dialogue has been instrumen­
ly to demand, with the aim of giving companies the tal in smoothing out cultural differences with
necessary flexibility and finding the most efficient regard to industrial relations. Bipartite bodies set up
and productive forms of organisation. The changes from 1985 onwards at cross-industry level, exten­
also meet workers' expectations in terms of having ding gradually to a number of sectors, have provi­
more leisure time and being able to reconcile family ded a forum for experimenting with 15-strong
and work responsibilities more effectively. negotiating teams and for clarifying the ground
One issue raised by these developments, however,
is the new balance to be struck between working In this context, it is essential to get the social
time flexibility and employee protection. Insecurity players at European level structured properly.
may stem both from employment periods and from Aspects of representativeness and delegation of
the employment contract itself. Discussions are authority have been central to the debates conduc­
focusing more and more on the need to consider ted in the wake of the entry into force of the Treaty
fragmented periods of working time from a general on European Union ("Maastricht Treaty"). With dis­
vocational point of view, including periods spent cussions continuing on these issues, the response
acquiring new knowledge and skills. from the social players themselves has been extre­
mely encouraging.
The working population in Europe (i.e. 61% of
people of working age) works an average of 1 600 The social dialogue has now reached the point
hours a year, corresponding to a full working lifeti­ where it must focus on the partners' ability to seize
me of around 70 000 hours. This quantity of work the opportunities afforded by the Maastricht and
may be managed in various ways, having regard to Amsterdam Treaties. On matters which are vitally
two questions to which all the EU Member States important to companies and workers, such as infor­
have tried to find answers. mation and consultation, skills acquisition, lifelong
training and mobility, it is necessary to modernise
the existing provisions, taking into account the The first question has to do with the flexibility of
rapid introduction of new technologies, the gro­working patterns and hours. The burgeoning areas
wing need for business flexibility, and the desire on of part-time work (17.4% of employment in 1998)
and weekend working indicate a trend towards the part of workers for further qualifications, mobi­
lity and a better balance between working and individualisation of working time and patterns.
family life. The many possibilities for taking a career break
(training leave, sabbaticals, parental leave, etc.)
provide further scope for arranging one's working It can be seen from the slowly emerging forms of
life. cooperation at European level that the social players
are increasingly taking account of the European
dimension and, in a number of cases, are using or The second question has to do with the reduction
of working time, either in the form of maximum creating the new tools needed for action at this level.
weekly and annual hours or in the form of early
retirement. There is clearly an ongoing long-term Nowhere is this clearer than in the case of transna­
tional companies where, under the impetus given trend towards shorter working hours. The current
technological revolution, bringing with it signifi­ by Directive 94/45/EC, more than 600 agreements
setting up mechanisms for informing and consul­cant productivity gains and heightened aspirations
for a better quality of life, has given fresh impetus ting employees have been signed. Lending a new
to the debate. form to European social dialogue, group works
councils help to foster exchanges of views and dis­
The Community approach in this field has been cussions which are essential for the development of
a multinational understanding of industrial rela­geared to protecting employees against risks to
their health or safety. More recently, the social part­ tions. In years to come, these group works councils
could provide the proper forum for addressing ners' framework agreement on part-time employ­
ment contracts endorsed the principle of equal issues such as mobility, transferability of rights and
equal opportunities. treatment. The social partners in the agricultural
Industrial Relations in Europe 4